FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended June 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period to
Commission file number 0-14542
SECURED INVESTMENT RESOURCES FUND, L.P.
(Exact name of registrant as specified in its charter)
Kansas 48-0979566
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5453 W. 61st Place, Mission, Kansas 66205
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number,
including area code) (913) 384-5700
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Interests ("Units")
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or such shorter periods that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
SECURED INVESTMENT RESOURCES FUND, L.P.
Index
PART I. FINANCIAL INFORMATION Page
Item 1. Financial Statements (Unaudited):
Balance Sheets -- June 30, 1995
and December 31, 1994 3-4
Statements of Operations -- Six Months
Ended June 30, 1995 and 1994 and Three
Months Ended June 30, 1995 and 1994 5
Statements of Partnership Capital --
Six Months Ended June 30, 1995
and the Years Ended December 31, 1994,
and 1993 6
Statements of Cash Flows -- Six Months
Ended June 30, 1995 and 1994 7-8
Notes to Financial Statements 9-10
Item 2. Managements Discussion and Analysis
of Financial Condition and Results
of Operations 11-12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of
Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
SECURED INVESTMENT RESOURCES FUND, L.P.
BALANCE SHEETS
June 30,
1995 December 31,
(Unaudited) 1994
ASSETS
INVESTMENT PROPERTIES
Land and buildings $ 16,377,255 $ 16,377,255
Furniture, fixtures and equipment 1,606,673 1,478,563
------------ ------------
17,983,928 17,855,818
Less accumulated depreciation
and allowance for losses 5,781,826 5,493,355
------------ ------------
12,202,102 12,362,463
------------ ------------
RESTRICTED DEPOSITS
Capital Improvement Cash Reserves $ 129,554 ---
------------ ------------
OTHER ASSETS
Cash 178,556 182,262
Rents and other receivables, less
allowance of $42,838 in 1995
and $141,476 in 1994 20,971 244,318
Prepaid expenses 35,309 20,932
Debt issuance costs, net of
accumulated amortization of
$28,945 in 1995 and $13,543
in 1994 161,837 133,371
Commercial commissions,
deposits and other 34,971 29,859
------------ ------------
431,644 610,742
------------ ------------
$ 12,763,300 $ 12,973,205
------------ ------------
SECURED INVESTMENT RESOURCES FUND, L.P.
BALANCE SHEETS--CONT'D
June 30,
1995 December 31,
(Unaudited) 1994
LIABILITIES AND PARTNERSHIP CAPITAL
Mortgage debt--Note B $ 11,747,217 $ 11,575,692
Accrued interest 170,411 282,889
Accounts payable and accrued
expenses 319,332 371,896
Due to related parties--Note C 61,897 62,100
Unearned revenue 55,078 60,859
Tenant security deposits 84,532 79,217
------------ ------------
TOTAL LIABILITIES 12,438,467 12,432,653
------------ ------------
PARTNERSHIP CAPITAL
General Partners
Capital contribution 1,000 1,000
Partnership deficit (52,849) (50,692)
------------ ------------
(51,849) (49,692)
------------ ------------
Limited Partners
Capital contributions 5,608,838 5,608,838
Partnership deficit (5,232,156) (5,018,594)
------------ ------------
376,682 590,244
------------ ------------
TOTAL PARTNERSHIP CAPITAL 324,833 540,552
------------ ------------
$ 12,763,300 $ 12,973,205
------------ ------------
See notes to financial statements.
SECURED INVESTMENT RESOURCES FUND, L.P.
STATEMENTS OF OPERATIONS (Unaudited)
Six Months Ended Three Months Ended
June 30, June 30,
1995 1994 1995 1994
REVENUES
Rents $1,097,322 $ 1,015,034 $ 544,288 $ 490,606
Interest 3,200 11 2,677 7
Maintenance
escalations 39,681 56,214 7,719 25,110
--------- --------- --------- ---------
1,140,203 1,071,259 554,684 515,723
--------- --------- --------- ---------
OPERATING AND
ADMINISTRATIVE EXPENSES
Property operating
expenses 372,993 337,850 194,633 164,706
General and
administrative
expenses 28,592 22,366 15,048 12,991
Professional services 27,871 48,913 14,931 30,594
Mgmt Fees & Reimbursed
direct expenses 56,209 47,774 24,914 21,208
--------- --------- --------- ---------
485,665 456,903 249,526 229,499
--------- --------- --------- ---------
NET OPERATING INCOME 654,538 614,356 305,158 286,224
NON-OPERATING EXPENSES
Interest 566,383 562,726 287,359 279,858
Depreciation and
amortization 303,873 300,005 152,527 149,435
--------- --------- --------- ---------
870,256 862,731 439,886 429,293
--------- --------- --------- ---------
PARTNERSHIP LOSS $ (215,718) $ (248,375) $ (134,728) $ (143,069)
--------- --------- --------- ---------
Allocation of loss:
General Partners (2,157) (2,484) (1,347) (1,431)
Limited Partners (213,561) (245,891) (133,381) (141,638)
--------- --------- --------- ---------
$ (215,718) $(248,375) $ (134,728) $ (143,069)
--------- --------- --------- ---------
Partnership loss per
limited partnership
unit $ (8.58) $ (9.89) $ (5.36) $ (5.70)
--------- --------- --------- ---------
See notes to financial statements.
SECURED INVESTMENT RESOURCES FUND, L.P.
STATEMENTS OF PARTNERSHIP CAPITAL
Six months Ended June 30, 1995 (Unaudited) and
the Years Ended December 31, 1994 and 1993
General Limited
Partners Partners Total
Balances at January 31, 1993 $ (38,837) $ 1,664,886 $ 1,626,049
Partnership loss (5,846) (578,751) (584,597)
---------- --------- ---------
Balances at December 31, 1993 (44,683) 1,086,135 1,041,452
Partnership loss (5,009) (495,891) (500,900)
---------- --------- ---------
Balances at December 31, 1994 (49,692) 590,244 540,552
Partnership loss (2,157) (213,561) (215,718)
---------- --------- ---------
Balances at June 30, 1995 $ (51,849) $ 376,683 $ 324,834
---------- --------- ---------
See notes to financial statements.
SECURED INVESTMENT RESOURCES FUND, L.P.
STATEMENTS OF CASH FLOWS (Unaudited)
Six Months Ended
June 30,
1995 1994
OPERATING ACTIVITIES
Partnership loss $ (215,718) $ (248,375)
Adjustments to reconcile
partnership loss to net cash
provided by (used in) operating
activities:
Depreciation and amortization 310,533 300,005
Provision for losses on rents
and other receivables (64,264) 5,860
Changes in assets and liabilities:
Restricted Deposits (129,554) ---
Rents and other receivables 287,611 58,158
Prepaid expenses (14,377) 47,312
Debt issuance costs (43,869) (19,700)
Commercial commission, deposits
and other (11,772) 5,522
Account payable and
accrued expenses (52,564) 34,419
Accrued interest (112,479) 126,847
Unearned revenue (5,782) (803)
Tenant security deposits 5,315 4,700
---------- ----------
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES (46,920) 313,945
---------- ----------
INVESTING ACTIVITIES
Purchase of and improvements
to investment property (128,109) (44,385)
---------- ----------
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES (128,109) (44,385)
---------- ----------
SECURED INVESTMENT RESOURCES FUND, L.P.
STATEMENTS OF CASH FLOWS (Unaudited)--CONT'D
Six Months Ended
June 30,
1995 1994
FINANCING ACTIVITIES
Due To/From $ (202) $ (17,943)
Principal payments on
long-term debt 171,525 (32,437)
---------- ----------
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES 171,323 (50,380)
---------- ----------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (3,706) 219,180
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 182,262 97,437
---------- ----------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 178,556 $ 316,617
---------- ----------
See notes to financial statements.
SECURED INVESTMENT RESOURCES FUND, L.P.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
June 30, 1995
NOTE A--BASIS OF PRESENTATION
The accompanying unaudited financial statements have been
prepared in accordance with generally accepted accounting
principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management,
all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included.
Operating results for the six month period ended June 30, 1995
are not necessarily indicative of the results that may be
expected for the year ended December 31, 1995. For further
information, refer to the financial statements and footnotes
thereto included in the Partnership's annual report on Form 10-K
for the year ended December 31, 1994.
NOTE B--MORTGAGE DEBT
Mortgage debt consists of the following:
June 30, December 31,
1995 1994
First Mortgages:
The Colony Apartments $ 3,716,792 $ 3,500,000
Foothills Village S.C. 2,621,779 2,621,714
Cascade Apartments 1,932,988 1,950,441
Hidden Valley Exchange S.C. 814,035 814,035
The Market S.C./Hidden Valley
Exchange S.C. 1,680,684 1,702,916
---------- ----------
Second Mortgages:
Foothills Village S.C. 980,939 986,586
---------- ----------
$ 11,747,217 $ 11,575,692
---------- ----------
Cash paid for interest totaled $678,861 and $431,765 for the six
months ending June 30, 1995 and 1994, respectively.
The mortgage for Cascade Apartments matured March 1, 1995. The
present mortgage holder has verbally agreed to temporarily extend
the mortgage until March 1, 1996 or until new replacement
financing is put in place, whichever comes first.
NOTES TO FINANCIAL STATEMENTS--CONT'D.
On January 17, 1995 the $3,500,000 Colony mortgage was paid off
through the issuance of a new $3,728,000 mortgage. This new
mortgage due in February 2020 has a fixed interest rate of
10.09%. The new mortgage also funded restricted deposits which
will be used for Colony capital repairs and replacements.
NOTE C--RELATED PARTY TRANSACTIONS
Affiliates of the General Partners are entitled to receive
payments from the Partnership for management and other services.
Specs, Inc. (a corporation in which the General Partner has a
minority interest) receives property management fees for
providing property management services and direct cost
reimbursements based upon time allocated to performing certain
Partnership functions. Amounts paid by the Partnership to
affiliates of the General Partners are as follows:
Six Months Ended
June 30,
1995 1994
Property management fees $ 56,209 $ 47,774
---------- ----------
Amounts due to (from) related parties consist of the following:
June 30, December 31,
1995 1994
Secured Investment Resources
Fund, L.P. III $ 82,351 $ 85,100
Secured Investment Resources, Inc. (20,454) (23,000)
---------- ----------
Due To (From) Related Parties $ 61,897 $ 62,100
---------- ----------
As of May 1, 1995, the Partnership began repayment of its debt to
Secured Investment Resources Fund, L.P. III of $3,000 per month,
which includes interest of 9%.
NOTE D--CASH DISTRIBUTIONS
No distributions have been made since January 1990. Future
distributions will be made only from excess cash flow not needed
for working capital reserves.
(The remainder of this page intentionally left blank.)
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Results of Operations
Revenues for the first six months of 1995 increased by
$69,000 (6.4%) compared with the same period last year.
Apartment rentals comprised $24,000 of this increase and
commercial properties accounted for the remaining $45,000
increase. The stronger apartment market allowed the
Partnership to continue increasing rental rates, and
discontinue the offering of rental concessions, while
maintaining a high occupancy. Several smaller leases were
signed at Foothills Shopping Center and Hidden Valley
Shopping Center, which accounted for the higher rental
revenues in the commercial sector.
Total operating and administrative expenses increased
$41,000 (11.5%) when comparing the first six months of 1995
to the first six months of 1994. Increased rental rates
have resulted in increased resident turnover. This
increased turnover has caused increased repair, contracted
services and payroll expenses. Professional services have
declined $21,000 (42.9%) due to the need for decreased legal
services.
The Partnership anticipates that operating results for the
first six months will be representative of the results for
the remainder of the year.
Liquidity and Capital Resources
During the first six months of 1995 $47,000 of cash was
consumed in operating activities, $128,000 was used for
investing activities and $171,000 was provided through
financing activities. The matured Colony mortgage of
$3,500,000 was paid off with a new mortgage in the amount of
$3,728,000. Of the additional funds from this new mortgage
$180,000 are being used to renovate the Colony Apartments.
These funds will be invested into capital improvements,
which will improve the curb appeal and marketability of
Colony, thus allowing management to increase rental rates
and maintain high occupancy levels.
During the first six months the Partnership received
$230,667 of delinquent rent from The Sampler Shoppes, Inc.,
the anchor tenant at Foothills Shopping Center and was able
to pay $138,000 of delinquent real estate taxes at Foothills
Shopping Center.
The Partnership is currently past due on mortgage notes
secured by Hidden Valley and The Market Shopping Centers.
The improved cash flow, the result of higher occupancy, will
be used to make these delinquent mortgage payments.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.-- Cont'd.
In addition, as of May 1, 1995 the Partnership began repaying
the advance from Secured Investment Resources Fund, L.P. III
at the rate of $3,000 per month, including interest.
The mortgage for Cascade Apartments came due in March, 1995.
The existing mortgage holder has verbally agreed to extend
this note, under the same terms and conditions, until March,
1996 or until new financing can be put into place.
The General Partners also anticipate that 1995 cash flow
from operations will continue to improve because of strong
occupancy, rental rate increases, and stabilized expenses.
The General Partners have the option of offering one or more
properties for sale. Any net proceeds in excess of the
outstanding mortgage balance could be used to generate
additional working capital.
The General Partners have determined it prudent to
discontinue cash distributions until such time that adequate
working capital and capital improvement reserves are in
place.
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
None.
Item 2. CHANGES IN SECURITIES
Inapplicable.
Item 3. DEFAULTS UPON SENIOR SECURITIES
None.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
Inapplicable.
Item 5. OTHER INFORMATION
Inapplicable.
Item 6. EXHIBIT AND REPORTS ON FORM 8-K
(a) Exhibits
None.
(b) Reports on Form 8-K
There were no reports on Form 8-K filed
during the quarter ended June 30, 1995.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
SECURED INVESTMENT RESOURCES FUND, L.P.
A Kansas Limited Partnership
(Registrant)
By:
James R. Hoyt
as Individual General Partner
Date: August 15, 1995
By: Secured Investment Resources, Inc.
as Corporate General Partner
By:
James R. Hoyt, President
Date: August 15, 1995